Rail strike may further slow movement of huge West Canada crop

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

A possible strike at Canada's biggest railway is compounding a vexing problem in the second-biggest wheat exporting country - how to move the western crop belt's abundant harvest to port with a strained transportation system.

A dispute between Canadian National Railway Co and its railroad workers raises the possibility of a strike or lockout as early as Oct. 29. Talks are scheduled to resume on Oct. 21, with both the union and railway hopeful of avoiding a work stoppage.

"Whenever there's a labor disruption, it has a huge impact on us," said Wade Sobkowich, executive director of the Western Grain Elevator Association, which represents grain handlers such as Richardson International Limited, Viterra and Cargill Ltd. "All grain shippers are concerned that we won't have sufficient rail capacity to move this large crop when we need to move it."

Agriculture and Agri-Food Canada estimates total crop production in Western Canada at a record-high 67.3 million tonnes and transport infrastructure is already struggling. Canada exports about two-thirds of its wheat and more than half of its canola.

Some farmers, waiting for congested country elevators to clear space, have piled grain on the ground, potentially risking contamination, while others are filling plastic silo bags that snake hundreds of feet across fields.

Some bursting-at-the-seams grain handlers, meanwhile, have resorted to storing crops in temporary "bunkers" that resemble hockey rinks with boards along the sides, pipes to dry the grain and tarps protecting it from rain and snow.

Railways are filling about half of the grain car orders within the same week, a situation that isn't unprecedented during the harvest, but not ideal for moving crops quickly, Sobkowich said, adding that elevators are about 95 percent full.

A bottleneck in Western Canada's crop pipeline has already expanded the discount in the cash price grain handlers pay farmers versus the wheat futures price, according to crop marketer CWB. It may also prevent some export sales as handlers look to avoid penalties for late delivery, Sobkowich said.

Most of Canada's crop production comes from its western provinces, where farmers and grain handlers rely heavily on Canadian National and Canadian Pacific Railway to move crops into export position on the Great Lakes or West Coast.

Effectively moving the big harvest will require all parties along the supply chain to work together, not just railways, said Canadian National spokesman Mark Hallman.

CN expects to have a C$100-million ($97 million) upgrade to its capacity on the Winnipeg-Edmonton corridor in place by the end of November, Chief Operating Officer Jim Vena said in September.

Canadian Pacific noticed strong rail demand from the grain sector before autumn, and increased the length of grain trains, said spokesman Ed Greenberg.

The railways are both offering a larger number of rail cars for grain than usual, said Mark Hemmes, president of Quorum Corp, which monitors rail performance in the grain sector for the Canadian government. But moving crops fluidly is also about matching the specific needs of vessels lined up, he said.

"The railways are motivated to move as much grain as they can, and they may have a tendency to grab grain from an origin that might not match what's required in that timeframe at the port. That's where we end up with congestion."

The bumper grain harvest comes amid a slump in offshore demand for potash fertilizer, but coal movements at Port Metro Vancouver are at a record high, said Doug Mills, senior account representative of trade development at Canada's largest port.

The projected record grain volumes and diverse profile of this year's wheat crop have led some vessels to anchor off Vancouver Island to wait for cargo, Mills said.

The federal regulator Canadian Grain Commission (CGC) has also fielded inquiries from exporters about using British Columbia terminals that typically store less grain than others, such as Kinder Morgan's North Vancouver terminal, said CGC chief grain inspector Randy Dennis.

Hemmes said he doubts much more of the Canadian crop than usual will move through the United States. Grain handlers rely on the same two railways to move crops south, and it is costly for Canadian farmers to truck crops to U.S. elevators unless they live close to the border, he said.

Such a big crop caught some farmers off guard. Around mid-summer, when it became clear big crops were on the way, demand spiked for on-farm grain bins and portable handling equipment.

"(There was) a mad scramble to buy it and get it installed," said Daniel Donner, senior vice-president of sales and marketing at Ag Growth International Inc.

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

Pacesetter Grain Hopper

The Pacesetter Gain Hopper features original and innovative ideas like the patented RollerTrap™, the industry’s easiest to open and maintain trap ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form